Chinese AI champion iFlytek sets up new entity to expand into semiconductor design

US-blacklisted company iFlytek has set up a new corporate entity to expand into semiconductors and other artificial intelligence-related fields as part of efforts to bolster China’s broader tech self-sufficiency initiatives.\nThe new entity, Shandong Yixun Information Technology, was incorporated last week with a registered capital of 50 million yuan (US$7.1 million), according to the latest information from Chinese corporate data provider Qichacha.\nThe scope of this entity’s operations would include integrated circuit design, AI software development and technical consulting for AI public services online platforms, according to Qichacha.\nBased in Hefei, the capital of eastern Anhui province, iFlytek on Wednesday said it did not have additional information about the business of Shandong Yixun.\nThe latest move by iFlytek, which made its name in the area of voice-recognition software, underscored the growing importance of semiconductor design in China, where a growing number of domestic tech companies are developing AI processors that could potentially rival those from industry heavyweights Nvidia and Advanced Micro Devices.\nIt comes amid this week’s determination by the US Trade Representative Office that Beijing’s drive for dominance in semiconductors was “unreasonable and discriminatory” and posed a direct threat to US commerce.\nThe agency said the US was implementing a tariff action on a wide range of Chinese semiconductors, with an initial rate of 0 per cent that would rise to a higher level in 18 months on June 23, 2027. The tariff rate would be announced 30 days before the deadline.\n\nWashington added iFlytek to the US government’s Entity List in 2019, which barred the Chinese company from obtaining US chips without a licence.\nThe company has been among the most vocal advocates for exclusively using locally designed chips for AI development projects.\nIn June, chairman and founder Liu Qingfeng said iFlytek was likely “the only Chinese AI model developer that insisted on using domestic chips”, including the Ascend 910B developed by Huawei Technologies.\nLiu admitted, however, that using mainland-designed semiconductors could delay the development of AI models by three months, but insisted that iFlytek would continue to use these chips and push improved processes.\nThe company had earlier claimed that its X-series AI models, with the latest version X1.5 released in November, were China’s only mainstream model family trained entirely with domestic computing power.\nWhile China has significantly closed the gap with the US in AI development, it remains years behind in cutting-edge semiconductors, according to analysts at investment group Citic CLSA.\n